CHINA'S long-delayed licenses for third-generation mobile phones were issued yesterday, promising a boost for the country's flagging economy and offering consumers a wealth of new services.

The Ministry of Industry and Information Technology gave 3G licenses to China Mobile, China Unicom and China Telecom in Beijing.

Chinese carriers are expected to spend 280 billion yuan (US$41 billion) on 3G networks and services in the next two years. The network spending could lead to 2 trillion yuan in private-sector investment in the next two or three years, said Chen Jinqiao, deputy chief engineer at the MIIT's telecommunications research institute.

The sale of 3G cell phones could top 300 billion yuan through 2011, according to Sinolink Securities analyst Chen Yunhong.

Consumers may now hook up to 3G services, including film downloads and video calls, based on both homegrown and Western standards. But time is still needed for all the carriers to launch their networks and start the new services.

The government approved 3G services, as expected, for three technologies: US-developed CDMA2000 (code division multiple access) for China Telecom, Europe-developed WCDMA (wideband CDMA) for China Unicom and the domestically developed TD-SCDMA (time division-synchronized CDMA) for China Mobile.

China Mobile yesterday was the first to put 3G into operation. It unveiled a new logo, G3, and new numbers starting with 188, which are considered lucky digits in China.

Most 3G service fees are similar to 2G charges, though the new video calls will cost 0.60 yuan a minute.

The timetable and fee structure for the other two carriers were not available yesterday.

Issuing the licenses will generate investment in network construction, handset development and new services.

The advent of 3G is expected to stimulate the Chinese economy and contribute 6 to 7 percentage points to the country's gross domestic product by 2010, analysts said.

"The 3G licenses will lift the performance of telecommunications firms, especially equipment makers, due to the huge size of the market," said Fang Lu, an analyst at Shenyin & Wanguo Securities. "The homegrown equipment makers will grab a bigger share of the market."

Firms such as Ericsson, ZTE, Huawei and Nokia-Siemens will also benefit, according to Sandy Shen, an analyst at Gartner Inc, a US-based IT consulting firm.

Nokia, the world's biggest phone vendor, will launch 3G phones based on all three standards and views the market as a huge opportunity.

Mobile Internet services, including video and program downloads, will become popular with 3G's faster data transfer speeds, according to service provider executives.

China now has more than 650 million mobile phone users ?? the most in the world ?? and adds over 5 million new users each month, according to the MIIT.

The start of 3G service had been promised for several years, but analysts said it was delayed while problems were worked out with the homegrown technology.

Also yesterday, the MIIT issued regulations covering the requirements of 3G network operation, covering such aspects as market competition, consumer rights, user information security, telecommunications fee management and facility building.

The licenses were issued a day after China Unicom announced it had won government approval to merge with China Network Communications Group Corp. The new China Unicom will hold all the assets and businesses of the two former companies.

The merger marks the final move in the restructuring of the country's telecommunications industry, which involved the merger of six telecom operators into three.

Cell phones reach warp speed

Q: What is 3G?

A: The abbreviation stands for third-generation telecommunications standards and technology for mobile networking, superseding 2G through higher data transfer speed. China has issued three 3G licenses based on CDMA2000, WCDMA and TD-SCDMA standards.

Q: What are 3G products?

A: They include mobile phones and data cards that can be plugged into the laptops for Internet access.

Q: Why should I use 3G?

A: Phone users can enjoy higher speeds and richer data services, including video calls, film downloads and multiplayer games on a handset platform. Laptop users can use 3G data cards for faster online surfing where Wi-Fi or broadband lines are not available.

Q: Which carriers sell 3G service here?

A: China Mobile operates a TD-SCDMA network. China Telecom will run a CDMA2000 network, and China Unicom will provide WCDMA services.

Q: When will 3G service be available?

A: China Mobile is already up and running. China Telecom said it would kick off service soon. But it said previously that it would finish network upgrades from 2G to 3G within three months in big cities. Insiders say China Telecom will start providing CDMA2000 services in major cities like Shanghai and Beijing in four to six months, while China Unicom will launch WCDMA later.

Q: How do I apply for 3G?

A: China Mobile users can buy a 3G phone (based on the the TD-SCDMA standard) and apply for a new 3G number starting with 188021 (021 is Shanghai's regional number). The carrier will start to accept applications around the Spring Festival, according to Shanghai Mobile's service hotline 10086.

If you don't want to change mobile numbers, you can buy a new 3G phone at the carrier's outlet now and plug in your SIM card; that is, if it's a China Mobile card.

China Telecom and China Unicom didn't disclose application details, but they both said their current users can upgrade to 3G in the future without changing numbers.

Q: Which 3G phones are available?

A: For TD-SCDMA, the choice of brands includes Dopod, Lenovo Mobile, ZTE and Huawei. Nokia and Samsung are developing TD-SCDMA phones, which are expected to debut by the end of this year.

For CDMA2000, LG, Samsung and Huawei provide various models for that standard overseas. Nokia, Motorola, ZTE and Dopod will provide the models for the Chinese market.

WCDMA offers the most choices of models. The Nokia N95 and iPhone 3G are popular WCDMA phones overseas. Nokia says it will launch the 3G version of phones in China as soon as "the service is available here."

Q: Can iPhone users enjoy 3G services in China?

A: No. For one thing, the necessary WCDMA service is not available yet. For another, Apple hasn't cooperated with any carriers in China.

Q: Who will buy 3G?

A: Tech-savvy consumers, information technology experts and fashion followers will probably be among the first batch of users.

Q: Is 3G expensive?

A: The answer is no if you use traditional services like voice callings and short messaging. For data services, China Mobile cut traffic costs up to 70 percent recently.

Video calls cost 0.60 yuan (9 US cents) a minute under China Mobile's service.

Q: Which 3G technology is better?

A: WCDMA is a comparatively mature technology as it has been adopted by many countries, including the United States, Europe and even in many emerging markets. Most handsets support the standard, and it provides users with a wide variety of phones.

CDMA2000 is also an international standard and is used in Japan, South Korea and the United States.

TD-SCDMA is a homegrown standard, and it's the earliest available 3G service in China.

Q: What about the speed of 3G?

A: The 3G data transmission capabilities should be able to deliver speeds up to 14.4 megabits per second for downloads, which would allow a user to download three songs in one second. Generally speaking, 3G is 200 times faster than 2G.